ANALYSIS of PHASE 1 ANALYSIS of PHASE 1

EMPLOYMENT PANELEMPLOYMENT PANEL 2006 - 2007 2006 - 2007

ononBUJUMBURA CentreBUJUMBURA Centre

I. I. SOCIO-DEMOGRAPHIC EVOLUTION SOCIO-DEMOGRAPHIC EVOLUTION

2007 Population estimated to 433.736 = + 15% / 2006

• Households nb: + 5% (+75 000 units). Their size pass from 5.2 to 5.8 persons (+ 10%).

• Predominance of males; a young population confirmed: medium age 21 years - 6 months /2006.

• Majority of couples with children (41% > 29% en 2006), over single-people households (- 7 points to 2%).

Cause n°1  : Soldiers previously living in Bujumbura are coming back and look for a job

I. I. SOCIO-DEMOGRAPHIC EVOLUTION SOCIO-DEMOGRAPHIC EVOLUTION (2)(2)

1.2. Dynamics of migration1.2. Dynamics of migration• In 2007 migrants = 32% in habitants (39% in 2006).

Natives are coming back mostly in low standing quarters (+ 10 points 76% of the strata 2007).

• In 2007 = 1rst motive = find a job > 40% des migrants (38% in 2006).

• Then: going on with studies (24% in 2007, 21% in 2006), then security & rebuilding family (both = 18%).

II. II. LABOR SUPPLY DYNAMICS (1)LABOR SUPPLY DYNAMICS (1)

2.1. Activity = F [gender ; social position] 2.1. Activity = F [gender ; social position]

• In 2007 = (149 550 actives) / (310.000 10 + ) = 52% => - 7 points / 2006. Less participation from the 15-29 ; the 60 + are retiring (see graph 1).

• Male activity rate = 57% ; 46% for female ; differences between gender are going down

• Households heads = 84% (- 4 points / 2006) ; spouses = 73% => a 2nd source of revenue

• Activity rate for migrants = 59% going down - 11 points / 2006 ; (33% for natives, - 5 points/2006).

II. II. LABOR SUPPLY DYNAMICS LABOR SUPPLY DYNAMICS (3)

2.3. Trend for unemployment: women & youngsters are mostly hit

• The unemployment rate is rising from 13.5% of active persons in 2006 to13.9 in 2007 ; the enlarged rate passes from 19 to 22% in 2007.

• The length of unemployment : from 5.2 years to 4.8 in 2007 : it is still very difficult to get back in employment because of the crises.

• This lasting unemployment - 58% in 2007 - hits mostly primary job seekers (66%) > those who lost jobs (47%)

II. II. LABOR SUPPLY LABOR SUPPLY DYNAMICS (5)

2.5. The revenue evolution stopped by inflation

• The inflation rate of 27%, gave an actual increase of only 2% for the average revenue in 2007.

• Graph 2: + 6% for active males; 0% for females => Gap between male and female from 21,000 to 25,000 FBu

• Revenue increased in administrations and informal sector (+ 2%); decreased in enterprises (both private & public)

• Increase (+ 13%) for employees at primary level, for bosses, self-account workers and unskilled  ; decrease for officers.

III.- STRUCTURE OF EMPLOYMENT (1)III.- STRUCTURE OF EMPLOYMENT (1)

3.1. Structure of employment in Bujumbura

• Wage employees’ rates: from 52 to 56% between 2006 & 2007 : formal employment is less in WAEMU 35%. In formal private sector = 80%

• Informal Sector = from 76 to 79% of active persons between 2006 & 2007. Then Public sector 18% of total employment and formal private sector =2,5% (14% in WAEMU ).

• Informal Sector Labor Force : 80% in IPUs < 6 pers. 32% = self-employed ; 67% on the street or within HH premises. 35% of workers are independent.

III.- STRUCTURE OF EMPLOYMENT (2)III.- STRUCTURE OF EMPLOYMENT (2)

3.2. Employment Dynamics on long period• Average time in employment = 7.1 years; 11.4 in formal

private; 7.9 years within informal sector. • Fluctuating employment in administration: decline

during the civil war; reprise till 2003 then 7% creation per year.

• Multi-activity = Chosen strategy to increase revenue but less than 7,000 workers in 2007 / 126,282 5,2% (7,4% 2006).

• Secondary jobs have similar repartition than main jobs: 89% are informal, mostly in Trade & services (25% & 33%)

III.- STRUCTURE OF EMPLOYMENT (3) III.- STRUCTURE OF EMPLOYMENT (3)

3.3. Working schedules and underemployment

• 20% of active population work less than 35 hours/week; 44% work > 48 hours/week.  

• Visible underemployment (% of active population working less than 35 hours/week against their will) is decreasing, from 17% to 15% between 2006 & 2007.

• Invisible underemployment (% of active population earning less than minimum horary wage) still massive (42% of labor force) but going down, - 9 points/2006.

• Total underemployment: decreasing, from 64% to 53% between 2006 & 2007. The labor market is structuring?

Urban Labor Force Survey in Urban Labor Force Survey in BurundiBurundi

COMPARATIVE ANALYSISCOMPARATIVE ANALYSISBASED ON PHASE 1 RESULTS BASED ON PHASE 1 RESULTS

ON FOUR CITIES IN 2007 ON FOUR CITIES IN 2007

Bujumbura, Gitega, Makamba, KirundoBujumbura, Gitega, Makamba, Kirundo

I.I. Approach and Context of the Project Approach and Context of the Project

1.2 Employment & Informal sector analyses achieved through enlarged partnership

• In Burundi. informal sector is creating more than 75% of urban

• Various roles of informal sector to be analyzed by activity branches. allowing the completion of national accounts

• Employment Directorate from Ministry of Labor and Bujumbura City Council have been closely associated to the Project

II. II. SOCIO-DEMOGRAPHIC COMPARISONSOCIO-DEMOGRAPHIC COMPARISON

2.1 Characteristics of urban population: tables 1/2

• 84.000 households in 4 surveyed cities; total population = 480.000 => 5.7 persons per HH

• Bujumbura (> 90%) ; Gitega (6.4%); Makamba (1.7%) & Kirundo (1.6%).

• 4 disparate chosen cities: No of persons per HH from 5.0 in Kirundo to 5.8 in Bujumbura.

• Share of migrants: from 24.5% of the total population in Gitega to 31.6% in Bujumbura

II. II. SOCIO-DEMOGRAPHIC COMPARISON SOCIO-DEMOGRAPHIC COMPARISON (2)(2)

Table 2Table 2 Bujumbura Gitega Makamba Kirundo

Number Households 74 946 5 859 1 486 1 563

Females HH Heads 23.5 21.1 18.0 32.2

Households size 5.8 5.2 5.4 5.0

One-person 2.3 4.7 6.3 4.9

Couple without child 0.9 2.3 1.3 2.5

Couple with children 41.2 44.1 44.1 41.2

Nuclear mono parent 9.2 8.0 6.9 9.7

Enlarged mono parent 10.2 9.1 5.4 12.8

Enlarged Households 36.3 31.7 36.0 29.0

Source : Survey phase 1 2007. ISTEEBU. 4 Cities

II. II. SOCIO-DEMOGRAPHIC COMPARISONSOCIO-DEMOGRAPHIC COMPARISON

2.3. 2.3. Scholarship & education levels inequitable & education levels inequitable

14% of 10 + are out of school: 25% in Kirundo among which 29% of girls.

• Secondary education – 1st cycle: 24% in Bujumbura; less than 9% in Kirundo.

• School failure = 2nde cause for drop-out (11%) ; from 20% in Makamba to 15% in Gitega

• Private sector: 16% of pupils in Bujumbura; 5% in Gitega/Makamba & 3% in Kirundo.

III. Activity and UnemploymentIII. Activity and Unemployment

3.1. Large geographical disparities in activity rates3.1. Large geographical disparities in activity rates• Population aged 10 + in 4 cities = 373,869 persons

among whom 180,495 active activity rate = 48% (45% according to ILO).

• In Bujumbura smaller rate 47.5% than in Kirundo 59% or Makamba (56%) where the 50 + more active (71 et 76%) as females (58% in Kirundo) while average = 43%

• Active HH heads: 82% (89% for high standing). For surviving in cities, housewives must work: 62% in Bujumbura ; 91% in Kirundo.

III. Activity and Unemployment III. Activity and Unemployment

Activity rate by City and Activity rate by City and sexe sexe

Table 4Table 4 Males Females Total

Bujumbura 52.5 42.4 47.5

Gitega 62.4 49.0 55.6

Makamba 57.0 46.9 52.4

Kirundo 60.7 58.3 59.4

Ensemble 53.3 43.2 48.3

III.III. Activity and Unemployment Activity and Unemployment (2)(2)

3.3. Urban unemployment: women and youngsters 3.3. Urban unemployment: women and youngsters mostly hitmostly hit

• Unemployment rate maximum in Bujumbura = 14%. In Gitega = 9%, Kirundo = 7% & Makamba 5%.

• Unemployment hits more women in Bujumbura (15%) & Gitega (10%) ; while a strong participation of women to the labor force femmes leads to a reduced rate in Makamba or Kirundo (4.5 et 6%)

• Heads of households are less hit (10.5%); spouses’ rate at14% ; youngsters (15-29) unemployment rate reaches 43%

V.- Labor Revenue and status within activityV.- Labor Revenue and status within activity

5.1. Labor revenue in main job

Bujumbura (74 200 FBu) > Interior cities (60 000 Fbu) ; Gitega = 66 000Fbu ; Makamba & Kirundo = 40 000Fbu

5.2. Work schedules and underemployment The visible underemployment is high in Kirundo, 18%, but low in Makamba, 13%. Globally, underemployment rate = 53.5% in urban areas cumulating in Kirundo 68%.

5.3. Working conditions disparate by sector 

In Makamba: 57% of workers have a written contract and 43% pay leaves ; In Bujumbura, these rates are resp. 39% & 34%, due to high informal sector.

Under-employment rates by cityUnder-employment rates by city

Table 5Table 5Visible under-

employment

Invisible under-employmnt

Visible under-employment

Bujumbura 14.8 41.6 52.7

Gitega 13.8 45.5 57.7

Makamba 12.7 43.0 52.6

Kirundo 17.7 59.0 68.2

Ensemble 4 villes 14.8 42.3 53.5

IPUs activity level by main branch & location

 Table 6Table 6 Bujumbura Interior Total

Total ac-tivities  UPI %  UPI %  UPI %

Total 1072 100 1105 100 2177 100

Primary 210 20.2 474 41.2 684 22.5

Manufact 153 13.5 106 7.2 258 12.8

Trade 488 47.8 303 31.7 791 46.0

Services 222 18.5 222 19.9 444 18.6

I.I. Scope of the mixed survey on Informal sector: Scope of the mixed survey on Informal sector: I.1 Definition of informal production unitsI.1 Definition of informal production units

How micro-enterprises/IPUs have been selected:In phase 1 individual questionnaire 3 criteria applied:1. non registration in any fiscal account,2. No formal written accounting system, 3. employ no more than 5 workers, In 2006: 46,954 IPUs and 831 micro-enterprises

identified during phase 1; 66% of households in Bujumbura have informal activity

Less than in other African capital cities (78%)

I.I. Scope of survey on Informal sector: Scope of survey on Informal sector: I.2 Trade activities are predominantI.2 Trade activities are predominant

IPUs are easy to create, requiring few qualifications: Trade = 49%, Manufacturing = 15% Services = 31%, In secondary sector: Building & Const. = 27%, Garments/shoes = 19%, Other manufacture (handicraft, furniture, food) = 53% , Transports et telecommunications = 26% Restaurants = 9%; Repair and mechanics = 8%; Other services (hair dresser etc.) = 53% of IPUs

Specialization of the two sectors by branch

I.I. Scope of survey on Informal sector: Scope of survey on Informal sector: I.3 Difficult exploitation conditions for IPUs I.3 Difficult exploitation conditions for IPUs

71% of IPUs are acting without workroom (20% at home): 77% for Tailoring, 65% for Repair & 80% for Transport

92% don’t have water, 85% electricity & 92% telephone,

For 75% of IPUs’ heads: informal sector = insertion in labor market Share of multiple IPUs < 31%,

IPUs are disorganized: < 5% are members of an labor organization (producers/traders)

Family helps only in 6% of cases

II. II. LABOR FORCE & INFORMAL EMPLOYMENT LABOR FORCE & INFORMAL EMPLOYMENT II.1 Self employment is the majorityII.1 Self employment is the majority

47,785 non agricultural IPUs have generated 83,332 jobs in 2006: 45,381 employees, Among them 83% wage earners, 6% family helpers and 7% apprenticesMicro-units: average size = 1.7 persons; 61% of IPUs are single-individual; 7% are employing more than 3 persons Less than 4% of the labor force have a written contract; 49% oral contract; 42% nothing at all !

II. LABOR FORCE & INFORMAL EMPLOYMENTII. LABOR FORCE & INFORMAL EMPLOYMENT II.2 Working schedule and compensationII.2 Working schedule and compensation

Average of 42 working hours per week; 24% of ILF work less than 24 hours; 22% > than 60 hours

Average monthly compensation = 23,700 FBu, => 168 FBu per hour. But, median monthly revenue = 12 000 FBu (great number of non paid family helpers/apprentices)

Bosses and associates (NOS) : average revenue = 32,000 FBu ; wage earners = 29,720 FBu

Women => 32% of jobs but receive less than half of men revenue (13,120 FBu)

III. FINANCING INVESTISSEMENTS III. FINANCING INVESTISSEMENTS III.2 Loans by informal sector III.2 Loans by informal sector

In 2005, 12% of IPUs have borrowed to finance their activities: Trade (70%) & manufacturing (18%)Among 5,500 IPUs, 65% got loans from friends or family and16% from banksLoans are mostly dedicated to buying raw materials (82%), 43% of borrowers got no difficulty to paying back; For other: conjuncture (55%), interest too high (22%), dates too tight (19%),

IV. Production, insertion & competitionIV. Production, insertion & competitionIV.2 Insertion in the productive systemIV.2 Insertion in the productive system

Origin of intermediate consumptions

88% of IPUs purchase raw materials from informal sector (56% from trade; 32% from households)

Formal sector supply IPUs only for 10%

Only 14% of IPUs are trading imported goods: 27% from Tanzania; 26% from other SADC countries, 12% from the USA & 6% from RDC

IV. Production, insertion & competitionIV. Production, insertion & competitionIV.2 Insertion in the productive system (2)IV.2 Insertion in the productive system (2)

Afterwards analysis: Destination of products

Households are main clients for 75% of IPUs; then come informal units (16%);formal sector only 1.5%

Competition : For 80% of IPUs, main competitors belong to informal sector

3 modalities for price formation: (i) fix trade margin (25% of IPUs); (ii) bargain with customers (30%); fix price according to the market (26%),

V. Relationship between informal sector & the StateV. Relationship between informal sector & the StateV.2 Towards a simplified fiscal systemV.2 Towards a simplified fiscal system

33% of IPUs are OK to register: 60% of IPUs with wage earners OK to pay taxes. 25% expect an easier access to credit; 19% a better placing on the market

53% request for a unique tax to be paid annually rising to 1,000 FBu (1 US $) per month

Tax management: 42% of IPUs select Communes; 19% choose central administration, 38% do not know

Priorities: (i) basic social expenses (46%); (ii) support to IPUs (32%); (iii) investments in infrastructures (15%)

VI. Issues and prospectsVI. Issues and prospectsVI.1 Weak market segments VI.1 Weak market segments

85% of IPUs heads declare meeting serious problems in exercising their activities; 50% are fearing to disappear as enterprises,33% find the demand insufficient (main expressed concern) 54% complain about credit shortage; 41% are suffering from inconvenient workroom; 20% are lacking machines or equipments Labor force is an issue only for 5% of IPUs. 25% are asking for vocational training (35% in manufacturing & services)

VI. Issues and prospectsVI. Issues and prospectsVIVI.3 Conclusions.3 Conclusions

Informal sector in Bujumbura = an effective way to get into a social & economical positionIPUs existing for more than 2 years are optimistic (> 80%),Informal sector in Burundi understands the basis of market economy: 69% of IPUs’ heads are claiming for competition; 16% are in favor of intervention from specialized organizations14% would like the Government to fix prices directly

1-2-3 SYSTEM IN BUJUMBURA 2006 1-2-3 SYSTEM IN BUJUMBURA 2006

SUMMARY REPORT ON PHASE IISUMMARY REPORT ON PHASE II

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